Sale of Bank of Yorba Linda Falls Through

A New York real estate and financial services company has backed out of a tentative deal to buy the Bank of Yorba Linda, saying it could make more money buying an ailing Texas bank instead.

And Bank of Yorba Linda’s chairman, John C. Coehlo, said Monday that he and other directors have decided to pull the small community bank off the market for now.

J.M. DeSimone Associates Inc. notified Bank of Yorba Linda two weeks ago that it was canceling the deal, Coehlo said Monday.

Joseph M. DeSimone, owner and president of the Smithtown, N.Y., company, could not be reached for comment.

“DeSimone and his investors decided to go to Texas and buy a larger bank that was in a little bit of trouble,” Coehlo said. “He said he figured he could make more money on it.”

Coehlo, Bank of Yorba Linda’s largest shareholder with 17.5% of the stock, said the once-ailing bank should not be sold now because it has returned to profitability.

“We took it off the marketplace,” he said. “We’re having a good year, and we think we’ll just make it stronger. We’ll look at the bank next summer and consider (selling) it again.”

The Bank of Yorba Linda lost a total of $753,000 in 1985 and 1986, but posted a $424,000 net income for the first quarter this year and expects to be profitable for all of 1987, Coehlo said.

The bank’s current assets total about $32 million.